NCC to mandate sustainability reporting in new corporate governance code

The Nigerian Communications Commission (NCC) is set to release an updated corporate governance code for telecom operators, with a major focus on mandatory sustainability reporting.

This marks a significant shift from the previous 2016 code and aligns Nigeria’s telecommunications industry with global environmental, social, and governance (ESG) standards.

The announcement was made by Dr. Aminu Maida, Executive Vice Chairman and CEO of the NCC, during the 2024 Annual Corporate Governance Conference, themed “Corporate Survival and Sustainability: The New Face of Governance.”

Mandatory Sustainability Reporting: A Key Shift The new code will require telecom companies to disclose detailed sustainability reports, providing insights into their environmental and social impact as well as their governance practices.

These reports will cover areas such as carbon emissions, resource consumption, labor practices, community engagement, and data privacy.

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By introducing this requirement, the NCC aims to enhance transparency and support sustainable development within the sector, responding to growing global and local demands for responsible corporate behavior.

“Sustainability is no longer optional,” Dr. Maida stated, emphasizing that these practices are critical for long-term success.

He highlighted the importance of telecom operators addressing both risks and opportunities tied to sustainability, which is increasingly becoming a core component of corporate governance.

Corporate Governance: A Driver of Performance Dr. Maida presented findings from a recent NCC analysis that assessed governance practices across Nigeria’s telecom sector.

The study evaluated key indicators such as board diversity, ethical conduct, risk management, and corporate social responsibility.

The results showed a clear correlation between strong governance and regulatory compliance, with companies demonstrating poor governance often underperforming financially.

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This underscores the strategic importance of good governance for telecom operators, beyond just meeting regulatory obligations.

In his speech, Dr. Maida outlined key governance components for the future of the telecom sector, including:

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Adaptability: With rapid digital transformation and evolving technologies, governance frameworks need to be flexible to address new challenges while maintaining accountability.

Data Privacy and Security: Given the sensitive nature of data handled by telecom operators, Dr. Maida emphasized the critical need for robust data protection measures.

He warned that data breaches could have severe consequences for both individual companies and the sector as a whole, and called for stronger governance policies to prioritize data security.

Telecom Industry Achievements and Challenges Dr. Maida also reflected on some of the major milestones and challenges in Nigeria’s telecommunications landscape.

He noted the success of the National Identification Number (NIN)-SIM linkage initiative, which required all phone numbers to be linked with verified NINs.

While the process was difficult for many, it was essential to secure the telecom ecosystem by blocking unregistered or unverified SIM cards.

The initiative, launched in December 2020, has since become a vital tool in enhancing security and combating fraud.

Looking back at the growth of the telecom industry since its liberalization in 2001, Dr. Maida highlighted its remarkable progress. “We’ve grown from just 305,000 active phone lines in 2001 to over 150 million active telecom subscribers today,” he said.

This expansion has played a key role in boosting Nigeria’s GDP, creating jobs, and empowering the economy.

Combatting Mobile Financial Fraud Another pressing issue addressed by Dr. Maida was the growing incidence of fraud in mobile financial transactions.

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With mobile platforms becoming the primary mode for banking in Nigeria, the NCC is working closely with the Central Bank of Nigeria (CBN) to develop a framework to reduce fraud in mobile financial services.

Dr. Maida explained that many financial services rely on phone numbers for authentication, but the current system lacks effective consequences for numbers involved in fraudulent activity.

He called for stricter enforcement measures to protect consumers and the telecom sector.

As Nigeria’s telecommunications industry continues to evolve, the updated corporate governance code and the emphasis on sustainability reporting are expected to drive greater accountability and position the sector for long-term growth.